Reported Trade Mark and Databases Rights Cases for November 2004

In the first case to reach the ECJ from the Cancellation Division of OHIM, the Court dismissed, by Order, an appeal from the CFI ([2003] CIPA 154) which had, in turn, upheld the decision of the Cancellation Division declaring that the mark in suit was invalid under Article 51(1).

Alcon registered the mark BSS in Class 5 for “ophthalmic pharmaceutical preparations; sterile solutions for ophthalmic surgery”. The CFI invalidated the mark on the ground that BSS was an abbreviation for “balanced salt solution” or “buffered saline solution” and therefore registered in breach of Article 7(1)(d).

Further, the mark had not acquired distinctive character pursuant to Articles 7(3) or 51(2). Alcon appealed to the ECJ on the grounds that: (1) In arriving at its decision on Article 7(1)(d) the CFI had taken into account documents supplied by the intervener purporting to show the non-distinctive character of the mark BSS dated after the date of application and\\or documents published outside the EU; (2) That the CFI wrongly disregarded its evidence demonstrating acquired distinctiveness through use.

The ECJ held that, insofar as Alcon’s appeal depended upon challenging the assessment of facts made by the CFI, that assessment was not amenable to review by the ECJ on appeal. The ECJ confirmed that the CFI was entitled to use documents that post dated the date of application in order to reach a view on the situation as at the date of application. On the use of documents that were published in the USA, the CFI had found as a matter of fact that the language of the specialists in the field was English and that the term BSS had become generic to the scientific community. Although the documents were published outside the EU, they supported the contention that to the target public the term had become customary. Once again this assessment was a matter of fact, not properly amenable to review on appeal.

Vedial S.A. v. OHIM*(ECJ; Case C-106/03 P; 12.10.04)

The ECJ dismissed the appeal from the CFI ([2003] CIPA 158) which had in turn upheld the First Board of Appeal’s decision rejecting the opposition, under Article 8(1)(b), to the combined word and device mark, HUBERT, registered in respect of Classes 29 and 30. Vedial’s opposition was founded on the French registration SAINT-HUBERT 41 in respect of certain dairy products in Class 29 and sauces and vinegar in Class 30.

In this decision, the Board of Appeal had acknowledged that, if the opponent’s mark had a reputation, then there was a likelihood of confusion. Before the CFI, OHIM had maintained that at the date of making the decision the evidence, of the reputation was not before them. Therefore the assessment was between the French registration and the application with out regard to the fact of the national mark’s reputation. The CFI held that the goods were similar, but there was no visual, aural or conceptual similarity between the marks. Vedial appealed to the ECJ.

Vedial relied upon three grounds: (1) The CFI had breached a principal of Community law (where its was for the parties to delimit the scope of the argument between them) in that it held that there was no similarity between the marks when OHIM and Vidial had already agreed that there was similarity, albeit only phonetic; (2) The CFI had infringed its rights of defence when it failed to deal with its legitimate expectation that the CFI would accept that the parties would delimit the scope of the appeal between the parties and; (3) The CFI had infringed the concept of the likelihood of confusion. The ECJ rejected all three grounds.

On the first ground, the ECJ held that even if that the doctrine that parties delimit the scope of argument applied in this case, it did not apply where OHIM was the defendant and the proceedings were to resolve a dispute between the opponent and a claimant for registration. The CFI was not bound by any agreement. On the second ground, the ECJ held that even if OHIM and Vedial had agreed the scope of the argument, the CFI was not bound and therefore was bound to examine whether OHIM had acted in accordance with Regulation 40/94. The ECJ rejected the last ground of appeal. The CFI held that there was no similarity between the mark and consequently correctly concluded that there was no likelihood of confusion.

Aventis Cropscience S.A. v. OHIM*(CFI; T-35/03; 12.10.04) (Judgment not in English at the time of writing)

The application for CARPO in Class 5 for fungicides, herbicides, insecticides and pesticides was opposed by the proprietor of an earlier Spanish mark HARPO Z registered for identical goods. The Opposition Division rejected the opposition on the grounds that there was no likelihood of confusion between the marks. The Board of Appeal dismissed the appeal, and the CFI upheld the decision of the Board of Appeal in its entirety.

The CFI confirmed that the global assessment of the likelihood of confusion must be based on the overall impression given by the marks, taking into account,inter alia, their distinctive and dominant components. The CFI held that the “Z” of the earlier mark constituted a distinctive element of that mark and added another syllable to the mark which made it easier to remember by the relevant public. Accordingly, the CFI decided that even when the products in question were identical, the visual, aural and conceptual differences were sufficient to prevent any confusion amongst the relevant public, in this case, the average Spanish consumer.

KWS Saat AG v. OHIM*(ECJ; C-447/02 P; 21.10.04)

The ECJ dismissed the appeal against the decision of the CFI ([2002 CIPA 556). KWS applied to register the colour orange (reference No. HKS7) in Classes 7, 11, 31 and 42. The examiner rejected the application under Article 7(1)(b) as being devoid of distinctive character. The Board of Appeal upheld this decision but in doing so carried out its own research on the originality of the use of this colour in the sector concerned by viewing the web page of another undertaking in the sector. The CFI upheld the Board of Appeal’s decision with respect to its findings in Classes 7, 11, and 31 finding but reversed the finding in relation to the Class 42 application, holding that the colour orange was capable of distinguishing the servicesper se.

KWS appealed to the ECJ on a number of grounds. The ECJ held that in not forwarding the web page to the applicant for comment, OHIM had breached Article 73. However, it was clear from the Board of Appeal’s decision that the web page was merely confirmatory and not decisive. As such this ground of appeal failed, as did the grounds relating to the alleged failure of the Board of Appeal to give reasons for its decision.

The appellant also alleged that (1) the CFI applied a more stringent criterion for colour marks that it did for other marks and (2) misconstrued the test for distinctive character and substituted its own view rather than the view of the relevant sector. The ECJ stated that Article 7(1) does not draw any distinction between the types of trade marks, but held that the CFI was correct when it pointed out that the public’s perception of a word mark or a figurative mark is not the same as a colour markper se. The ECJ held that only in exceptional circumstances would a colour mark with no evidence of prior use be distinctive. On the facts the CFI had not applied a stricter criteria in relation to colour marks than for other marks.

OHIM v. Erpo Möbelwerk GmbH*(ECJ; C-64/02 P; 21.10.04)

Erpo applied to OHIM to register as a Community trade mark the phrase “das Prinzip der Bequemlichkeit (the principle of comfort) for various classes of goods, including in particular furniture. The application was rejected and Erpo appealed. The Third Board of Appeal of OHIM dismissed the appeal for most part on the ground that the phrase in question was caught by Article 7(1)(b) and (c).

Erpo then brought an action for annulment of the decision before the CFI (Case T-138/00). The CFI concluded that the phrase in question, taken as a whole, was not descriptive for the purposes of Article 7(1)(c). It also found that the Board of Appeal had infringed article 7(1)(b) since it had deduced lack of distinctive character from descriptiveness of the phrase applied for as well as from the absence of an element of imagination or originality. The CFI held that the absence of an element of imagination or originality was not relevant when assessing distinctiveness and that it was not appropriate to apply to slogans criteria which were stricter than those applicable to other types of sign. It further held that the dismissal of the appeal would have been justified “only if it had been demonstrated that the combination of the words das Prinzip der… (the principle of…) alone with a term designating a characteristic of the goods or services concerned is commonly used in business communications and, in particular, in advertising”, which had not been established in this case. Accordingly, the CFI annulled the decision of the Third Board of Appeal.

OHIM appealed to the ECJ (this case) on the ground that it was not appropriate to limit the scope of Article 7(1)(b) in such a way. The ECJ reviewed the whole judgment of the CFI in relation to Article 7(1)(b). It concluded that the CFI had rightly rejected the requirement that a slogan must display an element of imagination or originality so as not to lack distinctiveness on the ground that it is inappropriate to apply to slogans criteria which are stricter than those applicable to other types of sign. Following cases such asHenkelandProcter & Gamble, the ECJ pointed out that the relevant public’s perception may not be the same for all categories of mark and that, therefore, it may prove more difficult to establish distinctiveness for some categories of mark than for others. In particular, the ECJ said that the authorities may take account of the fact that average consumers are not in the habit of making assumptions about the origin of products on the basis of advertising slogans. However, the ECJ made it clear that this did not justify laying down specific criteria supplementing or derogating from the criterion of distinctiveness as interpreted in the case-law. As regards the criterion applied by the CFI and according to which a trade mark is not devoid of distinctiveness within the meaning of Article 7(1)(b) unless it is demonstrated that the phrase concerned in commonly used in business communications, the ECJ held that this criterion was relevant in the context of Article 7(1)(d) but that it was not the criterion against which Article 7(1)(b) must be judged as each of the grounds for refusal listed in Article 7(1) called for separate examination. Accordingly the ECJ found that the CFI had applied a criterion other than the one laid down by Article 7(1)(b). However, it pointed out that this error of law had no influence on the outcome of the dispute and therefore dismissed the appeal.

In these opposition proceedings, Mann J. dismissed Reckitt Benckiser’s appeal against the hearing officer’s decision. The mark, registered in classes 1 and 3, was held to be devoid of any distinctive character. The mark in question comprised a rectangular tablet, consisting of a white lower layer and blue upper layer, with bevelled edges and surmounted in the centre by a red dome, which could also be interpreted as a recessed ball (the “Finish Powerball”).

Reckitt Benckiser submitted that the hearing officer had made an error of principle by failing to adequately consider the effect of the mark as a whole, concentrating instead on analysing its constituent parts. Further, he had not sufficiently taken into account the “striking” red ball.

Mann J. held that distinctiveness should be assessed in relation to the combination of features (here the shape and colour) as a whole. However, it was both permissible and sensible for the hearing officer to consider the constituent parts of a mark as well as considering the combination as a whole. Mann J. disagreed with the appellant’s argument that once a mark departs significantly from the market norm it is capable of denoting origin – the question is whether the difference is sufficient to render the mark distinctive, in terms of trade origin, and not simply distinguishable from other goods. This is more difficult to establish in relation to a shape mark.

Mann J. held that the hearing officer had clearly considered the effect of the combination of features as a whole, and his process of reasoning could not be criticised. In relation to the red ball, Mann J. considered that it was not realistic to suppose that the hearing officer had forgotten to take it into account and the hearing officer was entitled to find that it was not as striking as the appellant supposed.

In this trade mark infringement action, Rimer J. dismissed Philips’ claim, and on Remington’s counterclaim, revoked all the registrations.

The judgment was devoted in large part to the 452 mark registered in Class 8 in respect of electric shavers and depicted below.

The only material difference between this and the 408 mark which was the subject of previous litigation (see judgment of Jacob J. [1998] RPC 283, Court of Appeal [1999] RPC 809 and ECJ [2003] RPC 2) was that this mark has an inner line depicting a face plate of a clover leaf design rather than a plain, raised triangular face plate. The embellishment of the faceplate with clove leaf design was key to Philips’ case. Philips recognised that the decision in the previous litigation raised an estoppel preventing them from re‑opening the question of whether the plain triangular face plate consisted exclusively of a shape necessary to obtain a technical result. But as the Judge pointed out that, if they succeeded in the present case, it would suggest that the previous decision must have been wrong.

The learning generated by the previous litigation was the primary source of the principles applied by Rimer J. There was some lack of uniformity of expression in paragraphs 79-84 and 86.4 of the ECJ’s judgment when interpreting Article 3(1)(e)(ii). The inclusion of the word “functional” in paragraphs 83, 84 and 86.4 was a mystery and Rimer J. therefore read the key part of paragraph 86.4 as stating “a sign consisting exclusively of the shape of a product is unregisterable … if it is established that the essential features of that shape are attributable only to the technical result”. Rimer J. rejected Philips’ submission that the test as to whether a shape falls within the criteria of the prohibition depended on the subjective intentions of the designer – the prohibition was an objective one. He also rejected Philips’ submission in that the use of the word “only” in paragraph 86.4 of the ECJ’s judgment meant that each essential feature of the shape had to be solely functional.

Section 3(2)(b)

Rimer J. held that the clover leaf was not an essential feature of the shape of the 452 mark. The evidence did not persuade him that the presence of the clover leaf had a distinctive eye impact on the average user of shavers. Indeed, the evidence pointed the other way. A number of the witnesses only noticed the clover leaf once it had been pointed out to them.

However, that was not conclusive of disposing of the case under Section 3(2)(b), because the clover leaf formed part of the overall triangular face plate and was indisputably part of the face plate. The face plate as a whole formed an essential feature of the 452 shape and the question therefore was whether that face plate, of which the clover leaf formed part, was attributable solely to the technical result. In answering this question in the affirmative, the Judge held firstly that the clover leaf performed an essential function – that of stretching the skin and raising the hairs. It was no answer to that point that the like result could be achieved with a shaving head that had no clover leaf or only a much smaller face plate because the ECJ had said that it was not. Secondly, it was no answer to say that there were relatively small areas of the clover leaf which performed no function. The clover leaf had to be treated as a feature as a whole. Section 3(2)(b) did not require an analysis of every square millimetre of each essential feature of a shape in order to see whether or not it performed a technical function. Furthermore, the argument was factually incorrect. The whole of the face plate, including the clover leaf, contributed to the overall technical objective of giving a user a smooth, effective and comfortable shave and therefore the whole of it was attributable to obtaining that technical result.

Finally, the Judge rejected the argument that if a particular feature served both a functional and aesthetic purpose it could not be regarded as solely attributable to the technical result. If it were accepted, it would mean that (i) purely functional shape X, which has sensibly boasted no pretensions to eye appeal, would be precluded from registration as a shape mark, where as (ii) alternative design Y whose essential features were also functional but which was alleged to enjoy an element of aesthetic eye appeal, would not. The Judge did not see how this matter was to be tested. Moreover, to permit the registration of design Y, would undermine the heart of the policy underlying Article 3.1(e)(ii). In case he was wrong, the Judge held that on the facts the clover leaf was not there for its own aesthetic purposes.

In conclusion, Rimer J. held that the 452 mark was absolutely precluded from registration by Section 3(2)(b).

Distinctiveness

The Judge held that, if Philips had to prove that the 452 mark waspromotedas a trade mark (the question referred to the ECJ inDyson Ltd v. Registrar of Trade Marks[2003] ETMR 937), it had failed to do so. The most Philips could claim was that its advertisements included pictures of shavers with triangular shaver heads adorned with different styles of clover leaf.

As to whether the publicrecognisedthe 452 mark as a trade mark (this is the question referred inUnilever Plc’s trade mark application (Viennetta)[2003] RPC 35), the Judge held that the clover leaf element of the Philips’ shaver head had never had any significant eye impact on the public. However, the public did recognise the overall triangular head of Philips’ three‑headed rotary shaver as being part of a product made by Philips. The Judge declined to say anything further on the question of distinctiveness.

Infringement

On the question of whether Remington was making “trade mark use” of its three‑headed shaving heads, Rimer J. was of the opinion that the only way to resolve the differences in the law was by way of a further reference to the ECJ in the form of the unanswered questions 6 and 7 which the Court of Appeal had referred in the previous litigation. However, he found that the heads of the offending Remington shavers were not used in the trade mark sense of an indication of origin of the shavers. They were intended and did no more that promote themselves as the working heads.

Rimer J. held that there was no identity between Remington’s signs and the 452 mark, although the differences were only minor (following the ECJ’s decision inS.A. Societe LTJ Diffusion v. Sadas Verbaudet S.A.[2003] FSR 608). However, the heads of Remington’s shavers, complete with clover leaves, were confusingly similar to the 452 mark.

Remington’s Defence

Philips submitted that Section 11(2)(b) only applied to purely descriptive use of a mark, not where the mark also conveyed a confusing message of origin. The ECJ had failed to answer the 5thquestion which the Court of Appeal referred to it in the previous litigation. Rimer J. was of the opinion that were this question to be a relevant one in the present claim, the same question would have to be referred again. Secondly, Rimer J. followed Jacob J’s. decision in the previous litigation in declining to find that Remington’s use of its three‑headed shaver heads was or had been other than in accordance with honest practices.

The Other Marks

The other marks in issue all consisted of schematic representations (see above) and were also registered in Class 8 in respect of electric shavers. With a degree of hesitation, Rimer J. held that they incorporated no feature which was not necessary to obtain a technical result, thereby following the decisions of the French, Spanish and Italian Courts. The marks were minimalist representations of shapes whose essential features were attributable to obtaining the technical result. Further, subject to the proviso, the three marks were precluded from registration by Sections 3(1)(b) and (c). They were not independent from the appearance of the product they denote (following the ECJ’s decision of 29.4.04 inProctor & Gamble v. OHIM (dishwashing tablets)).

Finally, had it been necessary to decide the non‑use argument under Section 46(2), Rimer J. would have ordered the revocation of two of these three marks for non‑use. The mark depicted on the right hand side above had been widely used since registration.

In answering questions referred to it by the Greek Competition Commission, the A.G. was of the opinion that a dominant position held by a pharmaceutical undertaking is not necessarily abused where the undertaking refuses to meet orders placed by wholesalers in full, in order to limit the wholesalers’ parallel imports into higher priced Member States.

The Greek subsidiary of Glaxosmithkline PLC (“GSK”), imported and supplied various pharmaceutical products manufactured by its parent to wholesalers in Greece. In additional to supplying the national market, the Greek wholesalers also exported a large percentage of those products to other EU Member States where the sale prices were much higher. GSK stopped supplying the wholesalers entirely in November 2000. In response to interim measures imposed by the Greek Competition Commission, GSK reinstated the supply to Greek wholesalers but only insofar as it satisfied the national demand, thereby restricting the parallel imports into other Member States. Although the Greek Competition Commission assumed that GSK held a dominant position in relation to at least one of the products supplied, Lamictal, judgment was suspended to refer,inter alia, the following questions to the ECJ.

Is such a refusal by a dominant pharmaceutical undertaking to fully meet orders, thereby limiting the customers’ export activity, always an abuse under Article 82 EC Treaty?; and

If no, how should possible abuse under Article 82 EC Treaty be assessed?

Although there were instances where a dominant undertaking would be positively obliged to supply its products or services, for example, where some exceptional harm to competition would occur, the A.G. followed the decisions inUnited Brands(Case 27/76 [1976] ECR 207) andBP(Case 77/77 [1978] ECR 1513), stating that a dominant undertaking was entitled to take such steps as were reasonable and proportional to defend its commercial interests, but only by reference to the possibility of objective justification. Accordingly, the answer to question 1 was no.

In response to question 2, the A.G. went on to state that such a refusal was capable of objective justification where the price difference between the export and import Member State was, as in this case, the result of State intervention, given in particular:

the pervasive nature of State intervention in the pricing of pharmaceutical products;

the specific EC Regulations requiring national pharmaceutical undertakings and wholesalers to ensure the availability of adequate stocks of pharmaceutical products;

the potential negative impact of parallel trade on,inter alia, competition and incentives to innovate, considering the specific economic characteristics of the pharmaceutical industry; and

that end consumers of pharmaceutical products would not necessarily benefit from parallel trade and public authorities, as the main purchaser of such products, being responsible for fixing prices, cannot be assumed to benefit from lower prices.

In a claim for passing off, Park J. held that, although the claimant, Mr Perkins, rightfully owned the goodwill in the PENTATHLON brand of dart flights, none of the defendants had made a misrepresentation to the public that led them or was likely to lead them to believing that the dart flights were those of the claimant.

The House of Darts was the only wholesaler of dart flights sold under the brand of PENTATHLON. Since 1987, the second defendant, Retriever Sports Ltd, manufactured the dart flights under the PENTATHLON brand for exclusive supply to the House of Darts. Similarly, Retriever was the sole manufacturer of the PENTATHLON dart flights sold by House of Darts. No written contract existed between the parties. In 2003, the owners of the House of Darts sold the business to Mr Perkins along with the goodwill and the trade marks PENTATHLON and PEN-TATHLON. The trade marks were never registered. Both Mr Perkins and Retriever claimed to own the goodwill in the marks and both submitted largely different evidence in support of how they were the primary creators of the PENTATHLON brand. Soon after the sale to Mr Perkins, Mr Pope, a director of Retriever, terminated all dealings with House of Darts, but Retriever continued to manufacture and supply PENTATHLON branded dart flights to another wholesaler called Tommy’s Darts, owned by the first defendant, Mr Shone.

Having considered each side’s version of the facts, Park J. held that Mr Perkins was the owner of the goodwill in the PENTATHLON brand. Notwithstanding that he found that the first defendant’s sale of PENTATHLON flights damaged Mr Perkins’ goodwill, Park J. held that there was no “misrepresentation to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods of services of the [claimant]…” (per Lord Oliver, theJif Lemoncase [1990] RPC 341 at 406) and accordingly the claim for passing off failed. In his decision Park J.inter aliadrew a distinction between genuine and non-genuine articles. In the present case, the purchaser could not be misled by Tommy’s Darts, as they would inevitably receive the genuine article, namely genuine PENTATHLON flights.

The ECJ handed down four judgments regarding the interpretation of Directive 96/9/EC on the legal protection of databases. The ECJ chose not to follow the opinion of A.G. Sitx-Hackl ([2004] CIPA 429), instead taking a relatively restrictive view of the scope of the protection of databases.

TheBHBcase concerned William Hill’s use of information from the BHB’s database of detailed information about races and official register of thoroughbred horses. TheFixtures Marketingcases concerned unauthorised use, to organise betting pools, of fixture lists drawn up by the organisers of the English and Scottish football leagues.

In theFixturesMarketingcases, the ECJ decided that the database in question would not be protected by database rights.The expression “investment in the obtaining of the contents of a database”in Article 7(1) referred to the resources used to seek out existing independent materials and collect them in the database, not the creation of suchmaterials. In would thereforenot cover the resources used to establish the dates, times and the team pairings for the various matches in the leaguein the fixture lists.

In theBHBcase, the resources deployed by BHB to establish the date, time, place and name of the race and horse running related to the creation of data. There was therefore no relevant investment in the portions of the database extracted and re-utilised by William Hill such that a substantial part of the database had not been taken. There was also no possibility that, through the cumulative effect of repeated acts of extraction and/or re-utilisation, William Hill might make available to the public the whole or substantial parts of the database so as to prejudice BHB’s investment.

The key points of the judgments were as follows:

Article 7(1) provides thatsuigenerisprotection for databases is reserved to databases in respect of which “there has been, qualitatively and/or quantitatively a substantial investment in the obtaining, verification or presentation of their content”. The ECJ found that “investment” in relation to obtaining or verifying contents refers to the resources used to obtain or verify existing materials and collect them in the database. The resources used for the creation of materials which made up the contents of the database would not be taken into account. The fact that the maker of a database was also creator of the materials contained in it would not prevent its protection as a database so long as sufficient independent effort was used to obtain, verify or present those materials in the database.

Article 7(1) goes on to specify that the database maker has the right to prevent “extraction and/or re-utilisation of the whole or of a substantial part, evaluated qualitatively and/or quantitatively of the contents of the database”. The ECJ held that the terms “extraction” and “re-utilisation” must be interpreted as referring to any unauthorised act of appropriation or distribution to the public of the whole or part of the contents of a database and did not imply direct access to the database concerned. The acts required authorisation even where the contents of a database were made accessible to the public by its maker or with its consent.

The evaluation of a “substantial part” in quantitative terms, referred to the volume of data extracted from the database and/or re-utilised and had to be assessed in relation to the total volume of the contents of the database. In evaluating “substantial part” in qualitative terms, the Directive referred to the scale of investment in obtaining, verifying and presenting of the contents extracted and/or re-utilised, regardless of whether the subject represented a quantitatively substantial part.

Article 7(5) of the Directive also prohibits “repeated and systematic extraction and/or re-utilisation of insubstantial parts of the contents of the database implying acts which conflict with the normal exploitation of the database or unreasonably prejudice the legitimate interests of the maker of the database”. The Court held that there would only be infringement if the cumulative effects of the acts were to reconstitute and/or make available to the public the whole or a substantial part of the contents of the database and thereby seriously prejudice the investment made by the database maker.